Peru - Mass uprising defeats privatisation plans

After a week of protests and virtual uprising in the south of Peru, the government has backed down on its plans to privatise the water and electricity in the region. After
a week of mass protests and clashes with the police in the southern regions of
Peru, the government of Toledo was forced to halt its plans of privatisation of
two electricity companies, Egasa and Egesur, and to apologise to the people of
Arequipa, the city at the centre of the protests.

This wave of protests erupted on Thursday, June 13, the day before the bids
for the two electricity companies were going to be adjudicated. People in the
region had been protesting for a long time against these privatisation plans and
the mayor of Arequipa Juan Manuel Guillen, had managed to get a court injunction
against them on the basis that the regional government is part-owner of the
companies and had not been consulted. But Toledo's government decided to proceed
and the Minister of Justice even threatened to take the judge to court for
prevarication.

Mass protests and strikes against privatisation had already been taking place
for months, but on Friday, June 14, a mass rally of at least 20,000 people
turned violent when the police charged against the crowd. The anger of the
population in Arequipa and other southern regions can be easily explained by a
number of factors.

First of all Toledo himself during his populist and demagogical election
campaign had promised and signed a written statement in Arequipa to the Regional
Workers' Federation promising not to privatise Egasa and Egesur. In fact as a
result of his promises he got about 75% of the votes in Arequipa, which is the
second biggest city in the country, with some 2 million inhabitants. On top of
that, the privatisation plans included the immediate sacking of about 20% of the
workforce, and no job guarantees whatsoever for the other 80%.

Privatisation = Corruption

Peru has already had ample experience of privatisations and the balance sheet
is a complete disaster, causing jobs losses in their thousands, corruption, and
higher bills. During the Fujimori dictatorship there was already a plan of mass
privatisations (pushed by an agreement with the IMF) which allowed the state to
raise $9 billion. $1.8 billion went straight into paying the foreign debt and a
similar figure into some dodgy arms deals, with the result that the people never
benefited from the proceeds from these privatisations.

On top of all this, the privatisation of Egasa and Egasur has also been
marred by allegations of corruption. Because of the widespread protests that had
been taking place for months, most of the bidders withdrew from the sale and on
the day there was only one bidder left: the Brussels-based company Tractebel, a
subsidiary of the French multinational Suez Lyonaise des Eaux. Suez has been one
of the leading multinationals in the world investing in water and electricity
services, which have been privatised under pressure from the World Bank and the
IMF in the last few years. The record of Tractabel and its parent company Suez
is full of allegations of corruption and bribery in order to get contracts in
Kazakhstan, Pakistan, Indonesia, Oman, Chile and Brazil, amongst other
countries. In Peru the company stands accused of giving a $10 million coima
(bribe) to the country's former dictator Fujimori.

Some are asking whether the reason why Tractabel kept its bid in after all
the other companies withdrew was not because it had some assurances from the
government that the sale was going to go ahead regardless of the protests. Even
the fourth vice-president of the government Javier Diez Canseco said that the
base price for the sale, $177 million was ridiculously low. According to his
data, both companies have fixed assets worth at least $340 million and Egasa
alone has yearly profits of $80 million. To add insult to injury the final price
paid by Tractabel on June 14 was $10 million short of the base price fixed by
the government!

Mass
uprising

So it is not surprising that the mass protests in Arequipa soon became very
violent. Civil construction workers helped the people to lift the street's
cobblestones and use them to build barricades. The offices of privatised banks
and different government agencies were attacked by the demonstrators and some
were set on fire. The police used tear gas canisters to try to control the
demonstrations but finally had to retreat as the mass of people defended
themselves with sticks, stones and bottles and managed to maintain control of
the city's main square. The demonstrators were chanting "Arequipa,
revolution!" and "it's urgent, we need a new president". They
also made use of the emergency bells of the cathedral which were traditionally
used to rally the population for a revolution or an uprising (of which Arequipa
has a proud and rich tradition). Clashes continued throughout the weekend
resulting in more than 100 people injured, 52 arrested and damages to property
that the government put at $100 million. One student died after being hit
directly in the face by a tear gas canister.

The situation was clearly out of the government's control. The mayor of
Arequipa called on the army reservists to join in the struggle. Finally, on
Sunday, June 16, Toledo declared the state of emergency in Arequipa for a month,
suspending constitutional freedoms, declaring a curfew and putting the region
under the control of the army. Some 700 soldiers and 1,000 police officers tried
to regain control of the city.

On Sunday the clashes spread to the airport. A group of hundreds of workers,
peasants and students joined a group of residents of the barrios jovenes
(poor neighbourhoods) from the area and forced their way into the airport where
they destroyed equipment in the runway area. It took the army 3 hours of
fighting to take control of the installations.

The declaration of the state of emergency, far from bringing the situation
under control, added petrol to the flames. On Monday, the Broad Civic Front of
Arequipa declared an indefinite general strike and protests spread to the
neighbouring regions of Tacna, Cusco, Puna and Moquegua. Through their
organisations, most of these provinces decided to no longer recognise the
authority of President Toledo. Everywhere the different frentes (Fronts)that have been set up to fight privatisation took over the leadership of the
protests and called for an indefinite strike. These Fronts (the Broad and Civic
Front in Arequipa, the Patriotic Front in Tacna, the Regional Interests' Defence
Front in Ayacucho, the Regional Front in Moquegua, the Popular Organisations'
Front in Puno, etc) are made up of local and regional trade union branches and
organisations, students' organisations, peasant organisations, women's
organisations, and so on - although their composition varies from place to
place, in some provinces they include the local chambers of commerce and the
mayors (who in most cities and towns went on hunger strike), and in others they
have a more strictly working class and peasant composition.

Thus in Cusco, protests remained largely peaceful. The leaders of the
protests there seemed more afraid of the demonstrators than of the government!
Washington Roman Rojas, a leader of the Cusco Front declared that they were
holding talks with government representatives "to avoid the protests
getting out of hand". He added that: "it is not easy to control the
rank and file in places where the organisations are not yet very strong. This is
not the case in Cusco, where there is not going to be any violence, since we
have a solid structure and we are all together: the front, the mayors, the
chamber of commerce," etc. While workers and peasants, students and the
youth were fighting the police and resisting army occupation of their cities,
Roman was in the Congress building begging them "to suspend the
privatisation process if they want to calm the people down". In every
strike and every struggle leaders are put to the test, and, given enough time,
the masses, learning through their own experience, always move to replace those
who are more prone to making compromises and concessions by those who are most
reliable, more responsive to pressure from below, and more decided to carry out
the will of the struggling people.

In
Tacna, thousands of people marched on the city centre armed with sticks and
stones and attacking public administration buildings on their way. The police
was unable to regain control of the situation despite using a large amount of
tear gas canisters. Also in Tacna, groups of peasants set up a road block on the
main Panamericana highway.

The general strike was also solid in Juliaca and Puno and mass demonstrations
attacked public buildings and the offices of banks and privatised companies. It
is worth noting that this was not just senseless aimless looting, but was first
of all the result of the anger at the brutal repression against the people of
Arequipa and secondly was directed against the offices of privatised companies
and banks (which were sold off during the Fujimori rule, mainly to Spanish
multinationals). The participation of women, who were amongst the first to set
up barricades in Arequipa, and the youth from poor neighbourhoods was noticeable
everywhere.

In Arequipa itself, the clashes continued despite the state of emergency and
the curfew. The population came out on the streets en masse three times a day in
a cacerolazo (banging of pots and pans) protest. The Broad and Civic
Front leader Leonardo Maquera announced that a mass assembly of the Front had
decided to "continue the resistance and not to allow the new owners to
access the sites of the privatised companies". The Front also called the
people to "get organised through committees of struggle in every
neighbourhood, district and province, in order to participate in the indefinite
strike".

The conflict clearly adopted some of the characteristics of the Cochabamba
uprising against water privatisation in Bolivia in April 2000. The
formation of committees of struggle, the de-recognition of national authorities,
mass assemblies to decide the course of the struggle, clashes with the police
and the army in which the population managed to temporarily repeal the forces of
the state, the spreading of the movement to other regions, etc. These are all
symptoms of the rapid process of advance in the consciousness of the masses in
periods of struggle.

The government tried again to convince the people of the goodness of the
privatisation process. This is not like the privatisations under Fujimori, they
said - this is a "privatisation with a human face". The president of
the Ministerial Council, Dañino tried to explain that Tractabel had promised to
keep all the jobs, to invest $90 million in providing 60,000 people in Arequipa
with access to electricity and to generate at least 2,700 jobs through a land
irrigation programme. All these promises made no difference to the population in
southern Peru, particularly since Tractabel spokesmen declared that they had not
promised anything.

On Wednesday, June 19, the government, unable to quell the movement, sent a
high level commission to Arequipa to negotiate, but their bus was received by
the population with stone throwing. In Cusco, 10,000 students marched in protest
at the death of one of their comrades in the clashes in Arequipa, and occupied
some of the faculties. The student who died, the first martyr of the movement,
Edgar Adolfo Pinto Quintanilla, was buried in Arequipa after an impressive
funeral procession attended by thousands of people despite the state of
emergency. In Tacna on the same day, thousands of workers and peasants clashed
with the police while trying to take over the airport. The general strike
remained solid throughout the southern regions, paralysing transport, education,
shops and industry.

In fact, the movement acquired a broader character. The struggle was no
longer to stop the privatisation of Egasa and Egasur, but also to reverse the
privatisation of Etecen and Etesur, to demand extra reconstruction funds for
Maquegua (badly damaged by last year's earthquake) and a general opposition to
the government's economic policies.

The empty promises of Toledo's campaign

During
the protests, the US ambassador in Peru, John Hamilton welcomed the decision of
the government to stick to its privatisation plans despite popular opposition:
"What foreign investors look for is a strong government, with a firm policy
and able to stick to it." It is clear that these privatisations were a key
part of the government's policies. In a letter of intent signed with the IMF,
Toledo set himself the target of raising $700 million from privatisations this
year. The main aim was to reduce public deficit to 1.9% of GDP and to be able to
repay all its foreign debt obligations.

The problem he faces is that he was elected on a populist programme promising
to put the interests of the poor first and not to privatise any public
companies. Toledo came to power in the wake of the popular mass movement that
overthrew Fujimori at the end of 2000. The masses were not only fighting against
Fujimori because he was a dictator, they were also fighting against his economic
policies which had plunged the country into recession, privatised a great share
of state assets, and created widespread poverty. In order to win the elections
nearly a year ago, Toledo used his Indian roots and his poor family origins to
appeal to the masses of workers, peasants and the poor. However his origins had
been left behind a long time ago. He was a Harvard-educated, former World Bank
functionary, firmly committed to capitalist policies. It was only a matter of
time before the same mass movement that resulted in him coming to power would
turn against him. In fact it is quite clear that this movement is stronger
precisely in those areas where Toledo got the highest percentage of votes, and
even many of the mayors now on hunger strike are members of his own party.

Strikes, mass demonstrations and protests have been going on at least since
last September, barely a couple of months into his presidency. Police sources
say that they have registered 500 such protests in the last period. The movement
reached a first peak on May 14, when the regional fronts and trade union
organisations called a national strike with the support of the General
Confederation of Workers of Peru (CGTP).

The government defeated

Finally, faced with a spreading rebellion which was not able to control by
means of repression, and with the threat of a national general strike, the
government caved in on Thursday, June 20. The Arequipa Declaration, signed with
the leaders of the Arequipa Front, included the suspension of the privatisation
of Egasa and Egasur, a public apology on the part of the Justice and Interior
Ministers who had been the most belligerent in their statements and actions
against the movement, and the lifting of the state of emergency in 48 hours.

This was too much to stomach for the more right-wing sections of the
government and precipitated the resignation of Interior Minister Fernando
Rospigliosi (who resigned rather than apologising to the people of Arequipa) and
the Deputy Minister of Justice, Pedro Cateriano, the president of the
government's privatisation agency ProInversion, Ricardo Vega (although he later
on backtracked on his decision and stayed on in his job). There were rumours
that even the head of the Council of Ministers, Dañino, was also to resign.

The truth is that this was a serious blow to the Toledo government. His
popularity ratings (which stood at more than 60% just a few months ago) have now
slumped to only 15%. Foreign investors will not be keen to put their money in
Peru now, in case popular protests force the government to reverse them. The
country's currency slumped and JP Morgan Emerging Bond Index Plus increased
Peru's country risk rating as a result of the government's defeat.

And yet this is not the end of his troubles. The government has already
announced the introduction of an austerity plan of cuts in social spending
"to make up for the revenue lost with the reversal of the privatisation of
Egesur and Egesa". The Minister of Economy, Pedro Pablo Kuczynski, has
stated that the economic plans of the government will not be changed and
privatisation will continue. This is clearly a finished recipe for new
explosions.

In fact, this victory has encouraged the movement in other regions. In
Arequipa itself the victory was celebrated with a mass rally of 20,000 in the
city's main square which took place in a carnival-like atmosphere, despite the
fact the state of emergency was still in force. However, in Cusco, the victory
march was cancelled by the Regional Assembly and Front leader Washington Roma,
fearing that "third parties wanted to turn it into a protest march to
launch a new indefinite strike". Some organisations and parties criticised
Roma and Cusco's mayor Carlos Valencia for "backing down in this struggle
without having achieved the definitive suspension of all privatisations".

The mood was also a militant one in Puno and Juliaca, where rank and file
organisations gave the government six days to give a satisfactory reply to all
their demands, including the cancellation of the privatisation of Etecen and
Etesur and the fulfilment of its election promises. This was agreed in rallies
which took place at the end of mass demonstrations in both cities. In Puno, the
leader of the Popular Organisations Front, Toribio Saravia, called on all
workers to be alert since, he said, "what happened in Arequipa does not
mean an end of the privatisation of San Gaban, Electro Puno, Juliaca Airport,
San Antonio de Poto Mines and other strategic companies in Puno".

In Tacna, the organisations involved were discussing whether to continue with
the indefinite strike. The general mood was that until a high level government
delegation composed of at least four ministers was sent to Tacna to deal with
their demands the strike should not be called off. The Moquegua Interests
Defence Front which is composed of local trade union organisations, also
considered the Arequipa Declaration as insufficient to put an end to the
movement in their region and continued with the strike. A demonstration of 5,000
people also demanded the government send a high level commission to deal with
their demands, particularly reconstruction aid which had been promised by Toledo
in his election campaign.

With ups and downs it is clear that the mass movement against the Toledo
government will continue and in the process the mass of workers and poor
peasants will draw more and more advanced conclusions. They will realise that
the problem lies not just in one government but in the capitalist system itself
and the enormous pressure that imperialism exerts on their country. Through the
school of mass action they have already learnt that they can overthrow a
dictatorship, that they can fight back the state of emergency and reverse a key
government decision. This will give them more confidence in future battles. The
key task for trade union and left activists in Peru now is to create a
leadership with a clear understanding of the challenges ahead, particularly of
the need to link the struggle against privatisation, against poverty, to defend
jobs and conditions, with the struggle for the socialist transformation of
society.

This process is not taking place in a vacuum, but rather in a period in which
the mass struggle of the working class and the peasantry is advancing everywhere
in Latin America. The revolutionary movement in Argentina, the recent mass
movement which has also defeated privatisation in Paraguay, the revolutionary
movement which defeated the coup in Venezuela, mass struggles in Bolivia, the
general strikes in Uruguay, etc. The Argentinean contagion does not only mean
the spreading of the economic crisis throughout the continent, but also the
spreading of the revolutionary methods of mass struggle.

All these events are full of lessons from which the advanced sections of the
workers and youth must draw the necessary conclusions: only with the combined
struggle against imperialist oppression and the national bourgeoisie can the
oppressed masses of the continent really achieve genuine freedom, in the
framework of a Socialist Federation of Latin America.